Comparison of the Eligibility Criteria and Continuing Obligations for Listing on the Main Market, and AIM of the London Stock Exchange
Introduction
There are primarily two markets offered in London for listing securities, such as shares. One is the London Stock's Exchange's Main Market, which is divided into Premium Segment and Standard Segment, with the Premium Segment representing the highest standard of listing in London. The second is the AIM Market.
A summary of the differences between the three categories of listing are set out in the table below
Main market – premium Main market – standard listing AIM listing
Regulated market EU regulated market (Official List) EU regulated market (Official List) Multilateral trading facility and SME Growth Market
Prospectus/Admission Prospectus (Prospectus Regulation Prospectus (Prospectus Regulation Admission Document (AIM Rules) or Document Annexes I, II & III) Annexes I, II & III) Prospectus (if public offer)
Exchange Rules Admission & Disclosure Standards, Admission & Disclosure Standards, AIM Rules and Guidance Notes Listing Rules and FCA Handbook Listing Rules and FCA Handbook
Domicile Any Any Any
Depositary receipts No Yes (subject to conditions) Yes (subject to conditions)
Introduction & 01
Main market – premium Main market – standard listing AIM listing
Minimum free float i.e. 25% 25% No minimum required. Nomad the amount of the assessment of suitability. company's shares to be in public hands Minimum market £700,000 £700,000 No minimum required. Nomad capitalisation assessment of suitability.
Securities Securities to be freely transferable, Securities to be freely transferable, Securities to be freely transferable, fully paid and eligible for electronic fully paid and eligible for electronic fully paid and eligible for electronic settlement. settlement. settlement except where:
any jurisdiction, statute or regulation places restrictions on transferability; or where the company wishes to restrict number of shareholders domiciled in a particular country to avoid being subject to statute or regulation. Sponsor or Nomad Sponsor required for certain actions1 n/a Nomad required required Working capital for next Yes Yes (where a prospectus is being Yes 12 months issued)
Operating history and Historical financial accounts for a 3 Where a prospectus is being issued, the In certain circumstances, where a management year period to be provided with a company must provide historical prospectus is being issued, the historic revenue earning record financial accounts for a 3 year period, company must provide historical which supports at least 75% of the or less if it has existed for less than 3 financial accounts for a 3 year period company's business for the 3 year years period covered by the accounts
1 See LR 8.2.
02 & Introduction
Main market – premium Main market – standard listing AIM listing
Corporate Governance Independent Directors: Independent Directors: Independent Directors: The UK Corporate Governance Code See comments for Premium Listing. See comments for the Main Market. (the Code) recommends that except However, smaller companies should for smaller companies (below FTSE Committees: have at least two independent non- 350) at least half of the board of See comments for Premium Listing. executive directors. directors (excluding the chairman) should be independent non-executive Committees: directors. See comments for the Main Market. AIM Rules will also require an AIM Committees: company to adopt a recognised code The Code states that the board of corporate governance. should establish both a remuneration and audit committee consisting of at least 3 members (2 members for smaller companies) who should all be independent non-executive directors. The Code also states that all listed companies should have a nomination committee which consists of a majority of independent non-executive directors.
Business to be Required n/a n/a independent of controlling shareholder Relationship agreement Required n/a n/a with controlling shareholder Annual financial report Yes Yes Yes
Half yearly financial Yes Yes Yes report
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Main market – premium Main market – standard listing AIM listing
International Financial Yes Yes Yes Reporting Standards Publication of inside Yes Yes Yes information as soon as possible (i.e. information which is likely to have a significant effect on the company's securities) Major shareholder Yes Yes Yes notification regime applies Significant transactions Shareholder approval required if No shareholder approval required. Shareholder approval required if "class tests" met. reverse takeover or for disposals
resulting in a fundamental change in business.
Reverse takeovers Shares usually suspended from Shares usually suspended from trading Shares usually suspended from trading pending publication of pending publication of prospectus trading pending publication of prospectus relating to enlarged group relating to enlarged group and admission document relating to and approval of application for re- approval of application for re- enlarged group and approval of admission. admission. application for re-admission.
Shareholder approval required. No shareholder approval required. Shareholder approval required.
Related party Listing Rules (LR) No shareholder approval required. Details of relevant related party transactions transactions require notification to Shareholder approval required. Disclosure Guidance and Transferring the market but do not require shareholder approval.
04 & Introduction
Main market – premium Main market – standard listing AIM listing
"Class tests" applied. Rules (DTR) Nomad must confirm terms of transaction are fair and reasonable. Independent adviser must confirm If any 'class test' exceeds 5% then terms of transaction are fair and reasonable in certain circumstances.2 1. UK incorporation issuers must obtain board approval and Disclosure Guidance and announce Transferring Rules (DTR) 2. Rest of the world (but non-EEA issuers) must simply announce 4 If any 'class test' exceeds 5% then
1. UK incorporation issuers must obtain board approval and announce 2. Rest of the world (but non-EEA issuers) must simply announce 3
Pre-emption rights on Yes Not required by Listing/Prospectus Not required by AIM Rules but may issue of new shares for Rules but may be required by issuer's be required by issuer's domestic cash domestic company law company law
Further issues of shares A prospectus is required if more than A prospectus is required unless shares A prospectus is only required if 20% of shares of the same class are are not offered to the public and they shares are offered to the public.
admitted to trading over a 12 month represent less than 20% of shares of period. the same class over a 12 month period.
2 LR 11 3 DTR 7.3 applies to financial years beginning after 10th June 2019 4 DTR 7.3 applies to financial years beginning after 10th June 2019
Introduction & 05
Main market – premium Main market – standard listing AIM listing
Issue of convertible Permitted provided the company (i) Permitted provided the company (i) is Permitted provided the company (i) securities is not subject to any restrictions in its not subject to any restrictions in its is not subject to any restrictions in its constitution or under domestic law constitution or under domestic law and constitution or under domestic law and (ii) has waived any pre-emption (ii) has waived any pre-emption rights and (ii) has waived any pre-emption rights to issue sufficient shares on to issue sufficient shares on rights to issue sufficient shares on conversion. conversion. conversion.
Transfer between listing May move to Standard segment May move to Premium segment No "fast-track" procedure for moving categories without cancelling listing. without cancelling listing. from AIM to the Main Market so company will need to cancel its 75% shareholder approval required to No shareholder approval required. listing (see below) and comply with transfer out of premium listing. same requirements for a new listing. AIM Designated Market (fast track) AIM Designated Market (fast track) procedure for transfer to AIM Market procedure for transfer to AIM Market provided shares listed for at least 18 provided shares listed for at least 18 months months.
Cancellation of listing 75% shareholder approval required. No shareholder approval required. 75% shareholder approval required.
Tax benefits Payable Payable Exempt Stamp duty n/a n/a Yes (subject to qualifying criteria) EIS relief n/a n/a Yes (subject to qualifying criteria) VCT relief n/a n/a Yes (subject to qualifying criteria) IHT relief Yes Yes Yes ISA Yes n/a n/a
06 & Introduction
Main market – premium Main market – standard listing AIM listing
UK-REIT
Introduction & 07
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